Walling v. Burgess
| Decision Date | 30 October 1889 |
| Docket Number | 12,500 |
| Citation | 22 N.E. 419,122 Ind. 299 |
| Parties | Walling et al. v. Burgess et al |
| Court | Indiana Supreme Court |
Reported at: 122 Ind. 299 at 309.
From the Noble Circuit Court.
Judgment is reversed as to appellee Albert D. Burgess, at his costs, with instructions to sustain appellant's motion for a new trial, and for further proceedings in accordance with this opinion, and the judgment is affirmed against appellee Zoradia Hanvell.
A. C Chapin and R. P. Barr, for appellants.
H. G Zimmerman, for appellees.
This is an action brought by the appellees, as plaintiffs, against the appellants, to obtain possession of real estate and quiet title thereto. The complaint is in two paragraphs. The first alleges that appellees are the owners and entitled to possession of the undivided one-half of lots 70 and 73, in Mitchell's addition to the city of Kendallville, Noble county, Indiana, and that appellants have possession without right, claiming title.
The second paragraph alleges that appellees and appellants are tenants in common of the real estate, and that appellants are in possession, claiming title to the whole and denying appellees' title.
Appellants answered in four paragraphs. The first is a general denial, the others set up special defences. Demurrers were filed to each of the second, third and fourth paragraphs, and overruled and exceptions taken, and reply filed and trial had. The trial resulted in a finding for the appellee Albert D. Burgess that he was the owner and entitled to the possession of the undivided one-fourth of the real estate, and in favor of appellants against appellee Zoradia Hanvell and judgment rendered accordingly, and this appeal is prayed by appellants, and errors assigned by them. Appellee Zoradia Hanvell also asked and obtained leave and assigns cross-errors.
The court, at the request of the appellees, found the facts specially and stated its conclusions of law thereon.
We deem it unnecessary to set out the finding of facts in full. The conclusions of law were to the effect that appellee Albert D. Burgess inherited the undivided one-fourth of the real estate from his deceased father, and that the title had not been divested, and that the appellee Zoradia Hanvell's interest was barred by a decree against her quieting the appellants' title in the Noble Circuit Court.
Appellants excepted to each of the conclusions of law, also moved for judgment in their favor against both of appellees, the plaintiffs below, and also moved for judgment in their favor against appellee Albert D. Burgess which motions were overruled and exceptions taken, and errors properly assigned.
The appellee Zoradia Hanvell also excepted to the conclusions of law.
The facts found, summarized, amount to this: That Burgess and Hildreth were equal partners, engaged in the business of running a foundry and machine shop, and Burgess died. At the time of his death they owned as partnership property and as assets of the firm the real estate in question, consisting of lots 70 and 73, on which was erected the buildings in which they conducted said business, and in which building was the necessary machinery for conducting the business, which was attached to, and was a part of, the real estate, and was adapted to, and used for, conducting the business. One of the lots was conveyed to them jointly, and the other conveyed to them by their firm name.
They also owned a small amount of personal property, and the firm owed debts in excess of the value of the personal property of the firm.
On the day Burgess died he made a written instrument, conveying and transferring all of his personal property except his household goods to one David S. Welch in consideration of one dollar, in trust, to be sold by him and the debts of Burgess to be paid out of the proceeds, and the balance to be paid to his heirs, pro rata, according to their legal interest.
Burgess died, leaving Hildreth as surviving partner. At the time Burgess died the assets of the firm, independent of the lots and fixtures, amounted to the value of $ 1,005.40, and the indebtedness of the firm amounted to $ 2,564, leaving a deficiency of $ 1,558.60 after applying the proceeds of the personal property to the payment of the debts.
Welch, with the consent of Hildreth, and in the belief on the part of Welch and Hildreth that he had the authority to do so, took possession of the Burgess interest in the partnership, and Welch and Hildreth ran the business for a time in the name of Burgess & Hildreth, then, with the consent of Hildreth, Welch sold and conveyed the one-half interest in the business and property, including the real estate, to Hopkins and Hopkins in consideration of $ 2,400 and the payment of one-half of the firm debts.
In the sale by Welch to Hopkins and Hopkins he purported to act as trustee of the Burgess estate, and he and Hildreth believed he had the right to so act and convey a good title, and Hopkins and Hopkins also relied on his having authority to convey.
Hildreth and the Hopkinses ran the business for a short time, and the Hopkinses sold out to Hildreth, and Hildreth executed his note to Welch for the balance that the Hopkinses were to pay him, and paid the Hopkinses the balance, and borrowed $ 2,333 in money, part of which he used in paying firm debts, and the balance in making improvements on the property. Hildreth paid off the indebtedness and paid Welch, and Welch paid over to the widow of Burgess, Zoradia Burgess, all he received for the purchase. Albert D. Burgess was a minor.
Afterwards Hildreth sold and conveyed all the property, including the real estate in question, to the appellants and one Amos B. Park. Zoradia claimed an interest in the real estate for herself and minor son, Albert D., and a compromise was effected, and a suit brought by appellants and Amos B. Park against them to quiet title. Zoradia was properly served with notice, and authorized an attorney to appear for her. Albert D. was at the time a minor, and a resident of Ohio, and the notice as to him was insufficient, and he was sued by the wrong name. A guardian ad litem was appointed for him, and judgment was rendered against them, quieting title in the plaintiffs to that suit against the defendants. Amos B. Park afterwards sold and conveyed his title to appellant Henry S. Park.
All of these sales were made in good faith and for the full value of the property.
The firm being in the financial condition which it was, it is important to inquire into the authority of Hildreth as surviving partner in the settlement of the partnership. It was made the duty of the surviving partner, at that time, to file an inventory of the assets and a list of the liabilities of the firm in the clerk's office, but no forfeiture attached if he failed to do so, and if the survivor proceeded to settle the partnership, accounted for the assets and paid the debts, we fail to see how he would be deprived of any right which he would have possessed if he had filed the inventory of assets and list of liabilities as provided for by the statute.
According to the settled law of this State, which is supported by many authorities, the lots in controversy were liable for the debts of the firm, and are regarded in equity as personal property, and liable to be sold for the payment of the firm debts. As against the firm creditors and firm liabilities the widow and heirs of the deceased partner took no interest in this property. The property, the lots in question, according to the finding of the court, were at that time, the date of the death of Burgess, worth $ 4,458.28, and were liable for $ 1,558.60 of firm indebtedness, and subject to sale for the payment of the same, and the widow and heirs of the deceased partner, Burgess, had an interest in the undivided half in excess of the amount necessary to pay said firm indebtedness. It is held in the case of Huston v. Neil, 41 Ind. 504, where the members of a firm executed a mortgage without the wives of the individual members...
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